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Business News of Saturday, 6 August 2022

Source: www.nairametrics.com

EFCC battles black market to boost naira, local currency gains N60 to $1 within a week

Bureau De Change Forex Bureau De Change Forex

After plummeting to an all-time low of N710.00 the value of the local currency in Nigeria increased dramatically this week when compared to the US dollar on the P2P market on a week-to-week basis.

After the nation’s anti-graft agents raided currency operators in Lagos and Abuja, the naira recovered from a record low against the dollar on the black market, which strengthened it to N650 per dollar on Friday, thus keeping the naira up by N60 to a dollar in the last 7 days.

The Economic and Financial Crimes Commission (EFCC) reportedly searched bureau de change operators and questioned them about their operations while the anti-graft agents snapped photos of currency dealers and made copies of their identification cards.

The EFCC also threatened to detain Nigerians who are keeping large amounts of dollars and other foreign currencies in reserves. In a meeting with representatives of Bureau De Change operators on Friday in the Federal Capital Territory of Abuja, Abdulrasheed Bawa, the chairman of the anti-graft agency, announced this.

Bawa stated that the EFCC had intelligence connecting some people and organizations to the hoarding of foreign currencies, especially the United States dollars, in commercial cities all over the country, and warned those involved to stop or risk arrest as a major offensive against the speculators was underway.

What you should know

Recall that the CBN expressed concern about the value of the naira a few days ago and has since made conscious steps to stop the naira’s further decline.

In line with Governor Emefiele’s remarks on the currency crisis, currency speculators at these markets emphasized that enforcement agencies blamed “artificial dollar scarcity” for the naira’s problems and accused them of acquiring available dollars to create artificial scarcity.

The Nigerian apex bank stopped providing dollars to bureau de change operators more than a year ago, accusing them of exacerbating the foreign currency scarcity by selling it on the underground market.

Osita Nwasinobi, the director of the CBN’s corporate communications division, stated that the central bank would keep acting decisively in the foreign exchange market to stop further losses in the value of the naira.

He cautioned forex buyers not to fall prey to the speculative tactics of some FX market participants in order to stop the naira from depreciating much further.

According to experts, boosting dollar liquidity will be key to the naira’s further appreciation. There would undoubtedly be a decrease in the activities at the black market if the central bank keeps putting framework and structure in place to maintain liquidity.